Why you should care

The little Baltic nation of Estonia doesn’t often make the news, but when it does make headlines, it’s usually for its innovative digital initiatives. It’s one of the most tech-savvy governments in the world — and the nation that gave birth to Skype, online voting and online tax filings. And the man to thank for them is Taavi Kotka.

Kotka, 35, was a software developer and successful tech entrepreneur before becoming the country’s chief information officer (CIO) — yes, countries have CIOs — in 2013. Since then, he’s been on a mission to re-imagine IT systems and help boost his homeland’s image and economy.

The world needs new big challenges.

— Taavi Kotka

Estonia is already one of the world’s most digitally adept societies and a hotbed for software innovation that has hatched companies like Skype and TransferWise. The government and IT sector have been collaborating for over a decade, and today citizens can cast votes from their sofas and file taxes online in under five minutes.

Yet Kotka wants to take things to the next level with two groundbreaking initiatives. The first is to offer “e-citizenships” and expand the use of electronic IDs beyond Estonia’s borders. This will allow foreigners to use the nation’s convenient e-services to do things like open bank accounts or set up companies — thereby boosting Estonia’s economy — without setting foot in the country. This would be particularly appealing to non-European entrepreneurs looking to establish a company inside the EU.

The other trailblazing idea is to create “data embassies” by uploading government information to the cloud on foreign servers. That way, if Estonia suffers an invasion or cyber attack, the fundamental functions of the state can be preserved. Kotka is now working closely with the U.K. to launch the first embassy — with others planned for Berlin, Ottawa, Sao Paolo and Sydney.

I don’t have to work for money anymore. So now I want to do something for my country.

— Taavi Kotka

Both are very ambitious ideas, but Kotka is determined. “The world needs new big challenges,” he says. “Maybe we cannot conquer space, but we can create new virtual worlds here.”

Born in a small city in southern Estonia, Kotka’s parents were teachers who bonded over a shared love of chess. Kotka’s father bought him his first computer when he was 12, and he spent many of his teenage years in front of it playing games and flirting with the idea of becoming a hacker.

He studied information technology at the University of Tartu but dropped out to start working as a programmer. In 2000, Kotka took a new job at software development company Webmedia (now Nortal). Six years later he was named CEO of the Estonian division and, under his leadership, it became the country’s largest IT firm. He also founded several startups on the side, including Plumbr and Fits.me.

“Once you’ve started a company, you’re always looking for that feeling again,” he says. Kotka has the slightly scruffy look and nonchalant tone of a stereotypical tech entrepreneur, but his face lights up with childlike enthusiasm when he talks about his projects. “I’m an ideas person,” he explains. “I just love pushing things forward.”

In 2009, Kotka became the head of the country’s association of information technology and telecommunication, and two years later, he was named Estonia’s entrepreneur of the year. But despite the accolades, he missed the thrill of starting things anew.

So in 2012, he decided to sell his valuable company shares and look for a new challenge. Kotka considers himself a patriot and spares no praise when talking about his homeland, so when the minister of economy offered him the CIO position, he gladly accepted. “I don’t have to work for money anymore,” he says. “So now I want to do something for my country.”

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His first contribution to the government was his “No Legacy” policy — currently used by all Estonian ministries — which dictates that all public IT systems be rebuilt from scratch every 13 years. This is necessary, he says, “because the public sector is a monopoly in providing public services so it risks falling into the comfort zone.” Building from the ground up periodically also cuts down on maintenance costs.

The idea of e-citizenships was already on the table when he arrived, initially aimed at diplomats and businessmen. But Kotka thought this could interest many others and has promised 10 million “e-Estonians” — non-residents with an electronic ID and the ability to access the country’s services remotely — by 2025. Admitting he doesn’t know exactly how this will evolve, he says, “That’s the beauty! It’s a startup concept.”

His most-cherished brainchild, however, is the data embassy idea, which he hopes to start deploying before the end of 2014. “It’s brilliant,” says Kotka. “Russia could invade our territory, but it could never take over our institutions!”

Fears of a takeover might not be unfounded, in light of what’s happened in Crimea and the fact that Estonia, a former Soviet state, accused Russia in 2007 of launching a wave of cyberattacks against its banks, government and newspapers.

That said, not everybody is enthusiastic about uploading their country’s secrets onto the cloud. The opposition party, the leftist Central Party, is against it, just as it opposes electronic voting — insisting both initiatives pose too many potential security risks.

But Kotka says all the data will be encrypted and impossible to access or erase without authorization. “You would have to bring the whole Internet down,” he explains, describing it as “untouchable.”

Others fear that focusing so much on digital solutions might be excluding less tech-savvy citizens.

“A fourth of Estonians don’t use the Internet often,” says Anu Toots, professor of public policy at Tallinn University. ”The government declares it will continue to provide conventional services, but they are already disappearing, and it’s becoming very hard to live in Estonia without an electronic ID.”

Kotka admits that more needs to be done to improve digital literacy, but he thinks Toots’ claims are exaggerated. “I have never read an article saying Estonia has too much IT. And elderly people were actually the first adopters of the electronic IDs because they got advantages in public transport, and they also vote more electronically.”

It remains to be seen whether these innovative policies will give the country’s image and finances the boost Kotka is hoping for. But for now, whether they lead to prosperity or the Matrix, his bold ideas are putting Estonia on the innovation map.